The one-year spot rate is 9 percent per year the two-year


The one-year spot rate is 9 percent per year. The two-year spot rate is 9.5 percent per year.

Why would you expect the one-year-ahead one-year forward rate f12 not to be 8 percent? Explain.

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Financial Management: The one-year spot rate is 9 percent per year the two-year
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